Session Type: Poster Accepted by MIG(s): Time Allotted: 60 Description: This poster presents a paper that explores the effectiveness of eight leadership dimensions during the worst financial crisis since the Great Depression in the 1930s, and compares the findings to previous studies on leadership in crisis. Abstract: With the world economy having taken a great blow and employees fearing for their jobs and the survival of their organizations, the issue of what leadership is still effective at getting people motivated and instilling trust in the leader and the belief in their own abilities has become of great importance and will change the way we view leadership. Bass and Avolio (1990) hypothesized the potential superiority of charismatic leaders in crisis situations. Beyer and Browning (1999) provide an insight into the power of leadership. The crisis faced by the U.S. semiconductor industry in the 1980s called for leaders able to save a former successful industry from disappearance and regain strength in a globally competitive market. One of these leaders, the first CEO of a consortium founded to solve the crisis, was Robert Noyce. His charismatic leadership enabled an entire industry to overcome the crisis and even outlasted him after his death bringing a dying industry back to life.
Roberts (1985) described the case of a superintendent of a US school district that suffered severely after educational budget cuts. Although the financial issues already affected staff and programs, the superintendent called for job cuts and limitations of program funding. However, the superintendent proposed particular steps to be taken in the period to follow to re-energize the educational system and asked those involved for their suggestions. She instilled self-confidence, created a vision, and identification amongst employees. She also engaged with followers and emphasized to individuals, willing to work towards the collective goal and within the collective set of values, their importance for the successful implementation of the mission statement.
These are only two of many examples emphasizing the importance of particular leadership behaviors required during a crisis. The common theme are that particular behaviors appear to be most prominent in leaders leading during periods of crisis. The question remains, are followers equally affected by leadership behaviors effective during early crises in the greatest crisis in half a century. And are different types of follower outcomes equally affected by leadership behaviors or are some dependent on factors outside the leader's control considering the magnitude of the recent crisis?
The study therefore collected data from ninety full-time employees on the leadership effects on individual trust, overall and intrinsic motivation, work effort, and self-efficacy. Leadership was rated on a scale developed at INSEAD incorporating dimensions that have been proposed to be related to leadership effectiveness during times of crisis and non-crisis.
Although it may be assumed that given that those behaviors outlined in the two examples above will lead to positive effects for a variety of follower outcomes, the findings suggest that leadership behaviors differ greatly in their effects on different types of follower motivation, but also other follower outcomes. The findings show that only three leadership dimensions are significant contributors to any type of motivation. However, most noteworthy are those leadership dimensions that have been suggested to be important tools for leaders during periods of crisis.
Considering the importance of people's willingness to increase their work efforts to successfully steer through a crisis, the findings add value in that they show that those leadership behaviors most effective at increasing people's contribution to the overall goal are not by acting as a role model, rewarding them or giving them feedback on their performance, but by giving them greater levels of authority and engaging them in decision-making processes. Interestingly, people's level of intrinsic motivation does not increase by involving them in decision-making processes in times of crisis. This is a substantial difference to previous studies that showed that empowering leadership behaviors are related to intrinsic motivation (e.g., Lee & Koh, 2001). A possible explanation for the lack of relationship may be the urge amongst followers to contribute to the path ahead to work harder, however, they may merely expect a leader that is willing to walk the talk and act as a role model for followers to experience intrinsic motivation.
However, it appears that regardless of the type of leadership, trust in the leader is strongly related to any of the eight dimensions of leadership investigated in this paper. Followers, in crisis as well as in non-crisis, expect a leader to offer a vision, a path leading them out of the crisis, and reward them when their contribution is in accordance with the agreed goals.
Two leadership dimensions emerging as particularly important in the current study are the leader's empathic behaviors and awareness of follower needs. Embedding these behaviors into a collaborative environment allowing for mistakes without the risk and fear of losing ones job was shown to be crucial for all three types of motivation and trust. Their impact on followers is likely to be particularly important in the context of the crisis during which people seek a stable environment and a leader who is willing to listen to their concerns. Particularly as concerns and fear become overly prominent in crisis situations.
Conversely, a leader is very limited in what he or she may do regarding people's beliefs in themselves. One possible explanation is that follower focus shifts from leadership to other factors during a crisis. This is also a possible cause for the lack of relationship between work and rewards. It may not be important to the follower whether the leader rewards performance, but whether macroeconomic aspects threaten their job security. This is an important insight for both researchers and practitioners. With bonus systems a recent topic of controversy during the current crisis, the argument for their importance to keep the hardest working individuals may consequentially lack support.
Understanding the effects of leadership for follower trust, motivation, and efficacy is generally important. The wrong leadership behaviors may undermine trust and lower levels of motivation, subsequently leading to those who perform and are irreplaceable for the organization's success to resign mentally or leave. However, it is of utmost priority for survival during periods of crisis when organizations' mistakes may be fatal due to the detrimental context effects. Markus Hasel, EMLYON
Bio: Markus C. Hasel is Assistant Professor at EMLYON in France. His research covers trust in leadership, motivation, group processes, and performance. Prior to joining EMLYON in 2010 he completed his PhD and was working in the finance sector.
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